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What happens when AI agents become employees? At Zhaobei, they take on jobs, learn from experience, and find ways to game their targets. Managing an AI workforce takes more than getting the technology to work.
Resources › Working Papers Working Paper This version: April 2026JEL: D86, J41, O33, L23 Abstract We study how AI affects compensation and job design when performance depends on workers’ non-contractible effort. In a principal–agent model with limited liability, AI reduces effort costs but disproportionately lowers the cost of achieving satisfactory performance. This raises the incentive…